The current news is how desperate they are for financing.
The largest shareholder gets 1.5% of revenue, not as payment on the loan, but just as an incentive to make the loan.
But really, get an accountant or financial analyst to explain the loan
Yeah, well there are different kinds of hybrid cars. The most interesting type of hybrid car uses the hybrid system to make a four-wheel-drive. The BMW i8 does this with the internal combustion engine driving the rear wheels and the electric motor system driving the front wheels.
Also, electric cars can work well but only if they have carbon fiber tubs to save weight. And the BMW i3 does this.
To save the expense of using a carbon fiber tub is what a fuel cell car can do. (Although the Toyota Mirai is fairly heavy.)
Well, here's a quote from a July 28 corporate presentation PDF.
Revised mine plan:
Adoption of mechanized mining methods based on access to thicker, deeper mining blocks.
Mechanization will allow for rapid ramp-up and lower waste development
Mining dilution to be offset by lower costs.
Comments from the company that were in the press:
Suggested that mechanized mining was a new idea and as above.
Said that costs has escalated but is that the costs of building the mine or of running the mine ? (See, and for example, Russian oil companies have not been hurt by the lower cost of oil because the ruble has dropped more than oil,)
The low cost of oil should help, the drop of the rand should help, major platinum producers cutting production should help, Glencore cutting production of base metals should help, and I like mining companies that have a single new mine which is hopefully a high-margin mine but lets all go read the most recent conference call.
And the reason for using the most expensive batteries is that they recharge faster ? Well, they also catch fire easily and have to be replaced every seven years or so.
And the batteries are going to be used to buy electricity from the grid during non-peak hours ? Well, a turbine runs off natural gas. A fuel cell can reform hydrogen from natural gas and run off hydrogen. (The fuel cell needs replacement every seven years or so.)
I also see notes about hanging the lithium ion batteries on the wall. Now why would I want to hang the batteries on the wall ? The batteries have to be one central wired-in system or I'm not interested.
Basically, none of this is fixing air pollution and the cities are desperate about air pollution. The best hope I see is a solar oven that gets hydrogen out of water and does it with better efficiency than electrolysis. Then the hydrogen goes into a fuel cell
Well, profit on the production is not enough money to buy the production back. So buying the production back requires either options, futures, or extra cash on the books. Options and futures represent loans while cash on the books is limited. So a strategy of buying back production is really just short term trading.
Basically, I would buy platinum at $900 an ounce but sit still at $1050 an ounce.
Now if I were a precious-metal mining company selling production for break-even, what would I do ?
Well, sell the production but use the revenue to buy minted bullion. The income is booked as scheduled and the bullion is simply on the books as an asset.
Why not use futures ? Well, the short term futures contract rolled over into each new contract often is not very profitable in a rising price environment. The future date needs to be targeted with a longer term contract and not rolled-over up to it,
Definitely plunk a kilogram of platinum down on the coffee table.
In fact there is nothing wrong with ticker PPLT.
PLG is an uncomplicated platinum position because they have one high-margin mine. In fact, base metals are used as a credit against costs and so since base metals are down then costs are up. The costs were $629 an ounce so just pick a number and maybe that's $675 an ounce. Then add 50% for a desired platinum price and hope for $1012.50 . And really, as the VW scare subsides I think that $1012.50 is likely.
Oh, Glencore as a commodity trader has short term borrowings as a major part of their commodity positions. That means that they become less profitable as short term interest rates rise. That's why they go into their own commodity production but that requires long term debt.
A miner is mostly concerned with long term financing to develop the mine and then just a small amount of revolving credit for month-to-month operations.
Or a small miner with one mine might fund the mine development with equity financing and that's stock issues of course
Well, the commodity trading companies like Glencore are now having as much trouble as the major miners had. Apparently, their commodity trading involves buying at the spot price and then selling future delivery. Also, they do have some amount of commodity production and then the debt resulting from expanding into production.
I could buy the major miners at these levels. That's Barrick, Newmont, Goldcorp, and others. But I really favor a company that has a single high-margin mine and then no expansion plans. In other words if another mine to be developed is found than that becomes another company. And then I would like these companies with one high-margin mine to payout like a MLP does. That's pay near 90% of income as a dividend.
See, the consumer was already dubious about clean turbo diesels for low pollution.
Now, because of VW, no one is going to buy any turbo diesel. Not from VW, not from MB, not from BMW, not from Toyota or Honda, not from anyone. No one is going to buy a Cummings turbo diesel in a pickup truck. No one is going to buy a new school bus because they will just think that they might as well run their old buses.
Of course VW could replace their turbo diesel product lines with gasoline turbos. But their corporate fuel mileage is based on selling a percentage of turbo diesels. Finally, I'm not sure that anyone will buy any VW from here on
The only thing that can save VW at this point is carbon fiber chassis with turbocharged gasoline engine. But they can't move that fast.
Or they might buy Mazda and offer Mazda cars worldwide